Softening the Post-Christmas Sticker Shock : Consumer spending: Avoid malls and use only 1 or 2 credit cards to prevent overspending, experts advise.
Trisha Crumley knows South Coast Plaza like an old friend, but she never shops there.
An Orange County native, Crumley is a bargain hunter extraordinaire. She takes her bargain hunting so seriously that she has co-authored a book, “Buying Retail Is Stupid,” which lists alternative shopping sites in Orange and Los Angeles counties. To her, South Coast Plaza means buying retail.
Instead, Crumley recommends that shoppers beat the pavement to find smaller shops and discount dealers who offer the same quality merchandise at half off or more.
“The consumer is realizing they have been paying too much all these years,” said Crumley, who now lives in Tarzana. “We feel that if you shop the way we recommend, you can double your disposable income.”
Her advice?
Remember that shopping malls may be convenient and pretty, but they may not offer the best deals. Instead, she combs the garment districts, the factory outlet stores and even the outlets of major department stores, like the Nordstrom Rack. Orange County lacks clothing wholesalers that sell direct to the public, such as the Cooper Building in downtown Los Angeles. So Crumley says shoppers need to remember that big savings sometimes require longer drives to find the right stores.
Smart shopping takes a little education too. Crumley scans newspaper ads and listens to radio commercials to get a sense of the prices of competing merchandise. She always has an ear cocked for word of special liquidation sales. Consumer Reports magazine is her bible when buying appliances.
To stay within her Christmas shopping budget, Crumley makes a list of everyone she knows and budgets her gifts. Without it, “you can spend two or three times as much as you should” on gifts.
Pat Murphy-Kessinger, a retail analyst in Irvine for the accounting firm of Ernst & Young, said this is an ideal year to look for bargains in places that most shoppers would overlook. For instance, drugstores often offer substantial discounts on small appliances.
And with major liquidation sales underway at such venerable stores as Barker Bros, now is the time to buy furniture. Other, lesser-known stores may be having liquidations as well. Murphy-Kessinger said she saw men’s silk ties on sale for $9 each at one of Fashion Island’s most chic stores that was having a liquidation sale.
While the time is ripe for buying, it is also ripe for overspending. Shoppers who keep finding bargains too good to pass up can find themselves with credit card tabs in January that could make them pass out. Wise shoppers will pay attention to budgets as well as bargains.
Don’t walk into malls with a wallet with too many credit cards. Limit yourself to one or two for Christmas shopping, recommends Gerri Detweiler, spokeswoman for the Bank Card Holders of America, a 65,000-member consumer group based in Arlington, Va.
“It’s very easy to overspend if you have many cards. You put some here and you put some there, and before you know it you overspent,” she said. To avoid the problem, Detweiler said consumers should carry a checkbook balance page or a note pad to keep a running tally of all their credit card purchases.
Detweiler recommends against use of department store cards for Christmas purchases if the consumer plans to stretch out his or her payments over several months. Department store cards often carry interest rates of 19% or higher. Instead, consumers should use a bank-issued card with a lower rate.
Jerry Frannea, president of Consumer Credit Counselors of Orange County, a nonprofit agency which helps consumers with debt problems, said his caseload has increased 40% this year because of families caught with big credit bills they were unable to pay off in the recession.
“People should have a budget, not just at Christmastime but all year long,” he said. “The key is to sit down with the family and see how much you can afford to spend.”
One way, he said, is to spend the same amount on gifts for every member of your family. That way, cousin Louis will not be offended because he got a cheaper gift than Aunt Minnie. Most importantly, the gift giver can stay within budget.
And, Frannea says, if he could offer one single piece of advice to any consumer worried about paying their bills after a Christmas credit spending binge, it would be: “Pay cash.”
